Bed Bath & Beyond announced on Wednesday that it will not be opening or operating any stores in California, citing the state’s stringent policies as a significant factor in their decision.
“This isn’t about politics; it’s about the reality of doing business,” the statement read.
They expressed concern that California has developed an environment that is heavily regulated, costly, and, frankly, dangerous for businesses.
“The result is increased taxes, higher fees, and wages that many companies struggle to sustain, along with regulations that limit growth,” they added.
After filing for bankruptcy two years ago, the chain had started to make a comeback in retail after shutting down numerous locations.
The company mentioned shareholder commitments, along with a focus on “common sense” business practices, as the reason behind providing only e-commerce and delivery services in California.
Lemonis pointed out that California’s strict regulations could force them to raise prices at physical store locations, making it hard to assure long-term employment for their staff.
He specifically referenced the push to increase the minimum wage, especially in certain industries, to as high as $20.
A representative from California Governor Gavin Newsom’s office commented on the situation, noting, “Like many Americans, we thought Bed Bath & Beyond was a thing of the past.”
The spokesperson added hopes for the brand’s future as they attempt a new store opening.
Recently, the brand, under the ownership of Beyond Inc., launched its first new outlet in Nashville.
Earlier this year, Kirkland’s Inc. made a $25 million investment in Beyond, becoming the exclusive operator for new smaller Bed Bath & Beyond locations.
These “neighborhood” stores, sized at about 15,000 square feet, are part of a plan to open five this year.
They emphasized that the success of retail hinges on effective assortment, space management, and merchandising. The partnership seems to be a move towards a smaller footprint with reduced fixed costs, which they believe is the key to success.
A successful pilot program may lead to more extensive store rollouts, according to the company’s statements.
Kirkland’s operates over 300 stores across more than 30 states.
